Tourism Tax Dip Leaves Nothing For New Projects

Still lacking a robust visitor industry, Miami-Dade County does not expect to have money for new projects this year from its tourism-driven tax.

"At this time there does not appear to be a lot of money for extra projects," said county Budget Analyst Kim Johnson. "Most of the money we are paying out now has already been figured out through agreements with the municipalities and groups like the Performing Arts Center for certain operating money."

In September county commissioners are to approve a final list of projects and what groups will receive funds from the Convention Development Tax. But most of the money will probably go to projects in the pipeline, she said, not expansions such as a baseball stadium or convention center addition.

Revenue for this year will meet projections of $27.4 million set last year, but will be millions below pre-9/11 levels. The county plans to collect about $27.6 million this year and in June collections were down 15% from two years earlier.

"The last year before 9/11 we pulled in almost $31 million," Ms. Johnson said. "We haven’t even gotten close to those levels. There are only two months of collection left and occupancy in these two months appears to be slightly lower than expected."

Initiated in 1983, the Convention Development Tax comes from 3% of hotel or other temporary housing spending and is intended for projects that benefit the visitor industry. Money from the tax for current projects pays off bonds already approved; it does not pay for the day-to-day operations.

Of the money collected, two-thirds goes to the county and one-third to finance the Miami Arena – requirements written into the law creating the tax, according to the county’s website.

That requires about $9 million to go to the Miami Sports & Exhibition Authority to pay off bonds for the Miami Arena. Anything remaining of that one-third share after arena debts must be returned to the county.

The city’s sports authority promotes sports, conventions and exhibitions and was formed shortly after the convention tax was created.

In times of high tax collections, the sports authority has often returned several million dollars to the county.

"There were times when the CDT increased by 10% to 13% each year," said Director of Finance at Miami Sport & Exhibition Authority Ferey Kian. "Last year $2 million went back. Based on those revenues the county created commitments on Watson Island and the Children’s Museum."

In the past money from the tax was approved to help existing and new undertakings like the Performing Arts Center construction, the American Airlines Arena, the Miami Art Museum and the Miami Beach Convention Center.

Based on feedback from the hotel industry, Ms. Johnson said she does not think that next year’s revenue will be significantly higher.

"We don’t anticipate things improving greatly next year," Ms. Johnson said. "We’ve been talking to folks out in the industry and they said it is going to be relatively flat year over year. After that they see good growth coming in from conventions."